Health care planning and optimal distribution of hospitals in the State of Iowa (original) (raw)
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Controlling hospital cost inflation: new perspectives on state rate setting
Health Affairs, 1986
In the seventeen years since New York created a state hospital rate control agency, more than a dozen states have developed regulatory variations on this theme as their favored policy approach to moderating health costs. The antiregulatory mood that currently pervades many state capitols and which remains a central theme of the Reagan administration has slowed but not stopped the proliferation of state rate-setting agencies. In this essay, the three authors, all of whom advocate state rate setting as a workable approach to cost containment, take a new look at statelevel hospital rate regulation and examine three questions concerning its effect: (1) Does regulation have a significant long-term impact on the rate of cost inflation? (2) Does utilization of the hospital change significantly in regulated states? (3) Does rate setting adversely affect the financial strength of institutions in regulated jurisdictions? Carl Schramm, who holds a law degree and a doctorate in economics, is director of the Center for Hospital Finance and Management at The Johns Hopkins University and former chairman of the Maryland Health Services Cost Review Commission, one of the oldest state regulatory bodies. Steven Renn, an attorney who is an assistunt professor of health policy and management, also works at the center. Brian Biles, who holds a medical degree, is staff director of the House Ways and Means Subcommittee on Health.
Private insurers pay widely varying prices for inpatient care across hospitals. Previous research indicates that certain hospitals use market clout to obtain higher payment rates, but there have been few in-depth examinations of the relationship between hospital characteristics and pricing power. This study used private insurance claims data to identify hospitals receiving inpatient prices significantly higher or lower than the median in their market. High-price hospitals, compared to other hospitals, tend to be larger; be major teaching hospitals; belong to systems with large market shares; and provide specialized services, such as heart transplants and Level I trauma care. High-price hospitals also receive significant revenues from nonpatient sources, such as state Medicaid disproportionate-share hospital funds, and they enjoy healthy total financial margins. Quality indicators for high-price hospitals were mixed: High-price hospitals fared much better than low-price hospitals did in U.S. News & World Report rankings, which are largely based on reputation, while generally scoring worse on objective measures of quality, such as postsurgical mortality rates. Thus, insurers may face resistance if they attempt to steer patients away from high-price hospitals because these facilities have good reputations and offer specialized services that may be unique in their markets.
Importance of Pricing for Hospitals " Expenses from Financial and Social Perspectives
This paper analyzes the importance of health care services " charging applied by hospitals in USA. The subject is examined from financial and sociological perspective. In the first step, US hospitals " situation is described. After that, a comprehensive literature review on Pricing Theories is presented. In the next step, problems of health care sector are investigated from a sociological perspective. In the third part of the study, pricing applications of hospitals in USA are considered. The paper has shown that strong positioned interest groups in the US health care sector pay much less than the weak positioned. As a result of weak positioning 1.7 million people in 2014 filed for bankruptcy and 35 million people were contacted by agencies for uncovered bills. Furthermore, more than 15 million people spent all their savings to cover medical bills. On the other side, 1.1 trillion USD is spent by US federal and governmental states on health issues. Moreover, hospitals are complaining about underpayment. As a solution proposal to this problem, all actors in U.S. health sector must come together to find solutions to pricing of health care services and regulations required for better organization.
Competitive market forces and trends in US hospital spending
Objectives: To investigate components of the rapidly increasing trend in hospital spending in the 2000's and their relationship to market structure. Study Design: Aggregate time series and multivariate analysis are conducted to test whether hospital spending growth is driven by price or quantity and how recent hospital spending growth is related to health plan and hospital market structure. Method: Hospitals are grouped into strong and weak competitive markets based on the relative concentration of hospital and health plan markets as well as managed care penetration. Results: Inflation adjusted hospital spending grew much faster than gross domestic product (GDP) throughout the 2000s. Regression results show that rapid growth was observed across all hospital markets—even in those markets where price competitive market forces are the strongest and that rising hospital prices, and not utilization explain most of the increases in hospital spending. Conclusions: Hospital spending exceeded the consumer price index (CPI) by a substantial margin in the 2000's due in part to weakening competitive market forces, which had a dampening effect on spending and especially prices. Unless competition is restored, the cost of health care for consumers, employers and public payers can be expected to increase.
Costs and price competition in California hospitals, 1980-1990
Health Affairs, 1994
Critics of health care reform proposals that incorporate managed competition contend that it has never been broadly implemented. However, insurance plans that combine insurance with the provision of care have been widely implemented and have been tested most extensively in California. This DataWatch explores California's experience with health maintenance organizations (HMOs) and preferred provider organizations (PPOs), the introduction of which was followed by overall reductions in hospital costs. These reductions were larger in competitive markets. If implemented on a national scale, such selective contracting could be expected to reduce the growth of hospital costs even more rapidly than occurred in California. S everal health care reform proposals rely on managed competition to control costs. This approach envisages multiple levels of competition. Large health insurance purchasing pools would be created and would provide their members with information needed to rank competing insurance plans along several dimensions, such as price, coverage, and quality. Workers would be encouraged to be price-sensitive in their purchase of insurance by a requirement that the costs for services beyond those included in a standard minimum benefit package be paid for out of pocket. Insurers would compete vigorously for enrollees by trying to offer the most attractive combination of prices and plans. Insurers would play a critical role in a managed competition-based system by contracting with providers that offer the best prices, locations, and quality, thereby transmitting competitive pressure from the insurance market to health care providers. Providers would organize themselves into entities that could absorb the risk of contractual obligations that specify costs (and possibly quality) in advance. In combination, these changes are designed to provide all parties-beneficiaries, insurers, and providers-with incentives for cost-effective behavior. A major criticism of managed competition is that it is largely a theoretical construct, with little or no experience or empirical evidence to support its effectiveness. Although this is the case for some elements of the current health care reform proposals-particularly, forming purchasing pools and
Hospital wage and price controls: lessons from the Economic Stabilization Program
Health Care Financing Review, 1994
The Clinton Administration has implied that short-run failures to control health care costs may cause a reexamination of wage and price controls as elements of comprehensive health care reform. The most recent imposition of mandatory wage and price controls was the Economic Stabilization Program (ESP) of the early 1970s. We analyze trends in hospitals' economic behavior and utilization before, during, and after ESP. We also review the relevant literature to estimate ESP's impact, considering other factors that influence hospital behavior. Noting important changes in the hospital industry since the 1970s, we conclude that ESP had limited effect and that similar controls would have little effect today.